The following information is provided in response to the request for information form, filled by Tolo News reporter Mr. Zabih Ullah Jahanmal, and sent to DAB by 06/5/2021. We note the relevant facts below.
First, we note that this is a case between a bank and one of its customers. As such, the case under Afghan law must be managed in the court system. In addition, this case is a longstanding issue that has been ongoing for a number of years, and raises the question of why Tolo News has decided to follow this story at the current time.
Notwithstanding that this case is in the court system, we will provide the following details:
- Background: The case of Azizi Bank versus Mr. Abdul Ahad, a customer of Azizi Bank, is a personal case between a bank and one of its own customers. It is our understanding that Mr. Abdul Ahad had an account at Azizi Bank during the period 2010-2011 and after eight ( 8 ) years claimed that his funds were missing
- Timing: Mr. Abdul Ahad had numerous transactions between 2010-2011. His account was then dormant between 2011-2019. In 2019, Mr. Abdul Ahad filed a case against Azizi Bank claiming missing funds
There have been a number of previous legal decisions made regarding this case. We provide the following information:
- Settlement Agreement: A settlement agreement was signed between the two parties (in front of witnesses) on 1399/07/26. The agreement stipulates that Azizi Bank would pay AFN 8 million to Haji Abdul Ahad, and that thereafter the parties have no claim over one other
- FDRC Decision: As per Banking Law Article 74, cases between banks and their customers must be resolved at the Financial Disputes Resolution Commission (FDRC). The FDRC decided on 1398/09/23 that Azizi Bank should provide documentation related to the case
- Court Decisions: The case was then referred to the Afghan court system. There, two court decisions were made. First, the Commercial Primary Court on 1399/07/28 decided to uphold the Settlement Agreement. Second, Afghanistan’s Supreme Court on 1399/09/25 confirmed and validated the Primary Court decision
- Presidential Meeting: To ensure the case was properly managed, H.E. President held a meeting with the Supreme Court Justice, Attorney General, Ministry of Finance, and Governor of the Central Bank. Various directions were given to each entity
As this is primarily a legal issue, the role of Da Afghanistan Bank (DAB) in this process is to provide responses to any requests for information and ensure no larger impact on the banking sector. For this reason, we sent a team of professionals to provide technical views to the AGO’s request for information.
BANKING SECTOR IMPACT
Please note that this process has absolutely no impact on DAB’s regulatory capacity. This is a relatively longstanding legal case that has been in the courts for a number of years. Please also note that even in the case of an adverse legal judgment, the ruling would have no material effect on Azizi Bank, as the bank’s capital and liquidity ratios are amongst the highest in Afghanistan.
Furthermore, DAB recently sent multiple teams to all branches of the bank to conduct a detailed examination of Azizi Bank’s capital and cash levels and found no issues or discrepancies. In addition, to ensure no broader repercussions, the quarterly meeting of the Financial Stability Committee (FSC) between the Governor of the Central Bank and Minster of Finance was held on June 2, 2021. No major financial sector risks were identified.
In sum, the health, financial capitalization, and liquidity of Azizi Bank and Afghanistan’s banking sector are healthy.